TDS Payment &
Return Filing
Tax Deducted at Source (TDS) is a fundamental aspect of India’s taxation system. Understand your responsibilities to avoid massive penalties.
How Does TDS Work?
When a person or company makes a payment that falls under the TDS regime, they are required to deduct a certain percentage as tax. The rate of deduction depends on the nature of the payment.
- Salaries: TDS is deducted according to the income tax slab rates applicable to the employee.
- Contract payments: A standard percentage (like 1% for individuals and 2% for companies) is deducted.
- Interest on loans: TDS is deducted at a rate of 10% (as of current norms) for interest paid.
TDS Payment Due Dates
Once the TDS is deducted, the deductor must deposit the tax with the government. Generally, for non-government deductors, the TDS deducted in a particular month must be deposited by the 7th day of the succeeding month. However, there’s a crucial exception for the month of March, which must be deposited by 30th April.
Special Cases:
- Section 194-IA (Sale of Property): Due date is the 30th day of the month following deduction.
- Section 194-IB (Rent by Individual/HUF): Due date is the 30th day of the month following deduction.
TDS Return Filing Dates
TDS Return Filing refers to reporting the TDS deducted and deposited during a specific quarter to the government. It is mandatory.
| Quarter | Due Date for FY 25-26 |
|---|---|
| Q1 (1st April to 30th June) | 31st July 2025 |
| Q2 (1st July to 30th September) | 31st October 2025 |
| Q3 (1st October to 31st December) | 31st January 2026 |
| Q4 (1st January to 31st March) | 31st May 2026 |
Consequences of Default
- Interest: 1% per month for delay in deduction; 1.5% per month for delay in deposit.
- Late Filing Fee (Sec 234E): ₹200 per day until the return is filed (capped at TDS amount).
- Penalty (Sec 271H): ₹10,000 to ₹1,00,000 for non-filing beyond one year or incorrect filing.
TDS Rate Chart FY 2025-26
| Section | Nature of Payment | Threshold | Indiv/HUF Rate | Other Rate |
|---|---|---|---|---|
| 192 | Salary Income | Taxable limit | Slab rates | Slab rates |
| 194C | Payments to contractors | ₹1,00,000 aggregate | 1% | 2% |
| 194H | Commission/Brokerage | ₹20,000 | 2% | 2% |
| 194-I | Rent: Land/Building | ₹50,000/month | 10% | 10% |
| 194J | Professional Services | ₹50,000 | 10% | 10% |
| 194Q | Purchase of Goods (>₹10Cr turnover) | ₹50 Lakhs | 0.10% | 0.10% |
Stay Compliant with TDS!
Ensure timely TDS payment and accurate return filing to avoid harsh penalties.
Consult a Tax Expert Today